SORP – The Statement of Recommended Practice

SORP, or the Statement of Recommended Practice, is a guide created by the UK Charity Commission. It sets standards for charities when they prepare their annual financial statements.

Overview

Many Irish charities have chosen to adopt SORP voluntarily. They do this to follow best practices in accounting and reporting, ensuring transparency and accountability to their stakeholders.

With the Charities Amendment Act 2024, we expect SORP to be mandatory for charities with an annual turnover over €250,000 soon. We will keep members informed as we learn more.

Why Use SORP?

  • Promotes transparency in financial reporting.
  • Provides a detailed report of the charity’s activities and achievements from the previous year.
  • Improves the quality of financial reporting.
  • Enhances the relevance and understanding of information in charity accounts.

What are the Core Requirements of SORP?

Trustees’ Annual Report: Details about your charity’s:

  • Objectives & Activities
  • Achievements & Performance
  • Financial Review
  • Structure, Governance & Management
  • Administrative Details
  • Statement of Financial Activities (SOFA): Shows income and expenditure by classification and nature (restricted/unrestricted).
  • Statement of Financial Position (SOFP): Known as the Balance Sheet.
  • Notes to the Financial Statements.
  • Incoming Resources: Details of all income sources, like named funders, fundraising income, membership income, and earned income.
  • Statement and details of your financial reserves.

Practical Tips

  • Provide narratives – explain your finances, impact, and reserves.
  • Make connections – use your financial statements to inform the Trustees Report.
  • Use visuals: include simple charts to clarify trends in activity and finances over time.

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